Author Topic: Investment Culture  (Read 464 times)

Offline cybercoma

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Re: Investments
« Reply #45 on: March 13, 2017, 06:41:38 am »
And, with this, I will pickup my award for single longets post on this forum to date (at least until Rue finds this forum).
I added it to the bottom of your post. :)
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Offline SirJohn

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Re: Investments
« Reply #46 on: March 13, 2017, 12:20:37 pm »
Sure, the market will have a little freakout.

Wait, what? You said there would be NO MOVEMENT.

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Then it will get back to normal as people realize that rationally it still makes sense to make money since taxes are a fraction of the income

Well... yeah 99/100 is, I suppose a 'fraction' of the income. You seem to be taking the position, here and in previous posts, that taxation is of no interest to an investor, which is patently insane. Over a long term basis the stock market return averages out to about 7% per year.
Now you want to increase the tax rate from 50% to 100%, or in other words, instead of paying about 25% of that gain in taxes, I'd be paying 50% in capital gains. That CLEARLY has a huge impact on my gains. On $1000 gain it means I actually make $500 instead of $750.

And you pretend that's immaterial and no investor should care!?


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Dividends are taxed at lower rates (personally) than wages/interest because of tax integration: since the CDN corp pays income taxes on the income then used to pay the taxable dividend to the individual shareholder the shareholder pays a lower rate.

And I pay income taxes on my primary income. And then take a portion of what is left over - that already taxed money - to invest in the market.


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But capital gains?  For some reason this deserves a tax subsidy because people are taking a risk and there may be an inflation component to capital gains.

It's recognition that that money has already been taxed, and that in most cases, people are saving for their retirement, which is something to be encouraged.


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Ordinary Canadians should cheer this as it will help keep their taxes lower.

Well, given my taxes are at about 53% - not counting municipal taxes and things like the HST or gas taxes, I'd certainly welcome that. But of course, this will simply increase taxes on me to the benefit of those 'ordinary Canadians' who I gather you think are the ones who pay no taxes but enjoy all the benefits of life in Canada.

Offline msj

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Re: Investments
« Reply #47 on: March 13, 2017, 02:43:57 pm »
Wait, what? You said there would be NO MOVEMENT.


If you understand what the Benjamin Graham quote means then you understand what I mean: in the short run the market movea due to emotional reactions while in the long run it will be largely meaningless.

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Well... yeah 99/100 is, I suppose a 'fraction' of the income. You seem to be taking the position, here and in previous posts, that taxation is of no interest to an investor, which is patently insane. Over a long term basis the stock market return averages out to about 7% per year.
Now you want to increase the tax rate from 50% to 100%, or in other words, instead of paying about 25% of that gain in taxes, I'd be paying 50% in capital gains. That CLEARLY has a huge impact on my gains. On $1000 gain it means I actually make $500 instead of $750.

I do not see how you help your cause by exaggerating tax rates.

The top tax rate in BC is around 48%. 

High?

Yes, but not 99% so stop attempting to be hyperbolic because it looks like stupidity to me.

As for taxation on gains - yes, of course a higher rate will effect the taxes.

But to claim that paying 48% on that 1% of interest being earned is going to affect your decision to try and make 7% from the stock market (where you currently pay 24% and perhaps will end up paying 36% if the inclusion rate was increased to 75%) is laughable.

Especially since the vast majority of people have their investments in RRSP's and TFSA accounts which would not be effected by this tax change.


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And you pretend that's immaterial and no investor should care!?

To 95%+ of Canadians it will have little to no effect on them at all over the course of their entire lives since the majority will not have taxable capital gains since they have a tax free principal residence, a taxable RRSP account (upon withdrawal) and a tax free savings account.

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And I pay income taxes on my primary income. And then take a portion of what is left over - that already taxed money - to invest in the market.

It's recognition that that money has already been taxed, and that in most cases, people are saving for their retirement, which is something to be encouraged.


BUT THE MONEY IS NOT GETTING TAXED AGAIN!

Honestly, this is one of the stupidest things I hear people say and it is extremely ignorant to say the least.

Think about it:

You make $1,500 and pay $500 in income tax.

So you have $1,000 that you then invest.

You buy ABC company for $1,000, earn a quarterly dividend of $50 and then sell the investment for $1,300.

You will pay tax on the $50 dividend and the $300 gain (gross - taxable $150 at the 50% inclusion rate). 

So, NO YOU ARE NOT PAYING TAX "AGAIN" ON THE $1,000 so stop being so god damned ignorant about it.

If you were getting taxed on it a "second" time then you would pay tax on the entire gain of $1,300.

BUT THAT IS NOT HOW IT WORKS.

If you ever did have a capital gain and ever did fill out your own tax return then you ought to know this.

Instead I think you live in the basement of your parents tax free principal residence.  ;D

As for saving for retirement: use RRSP's to defer tax and TFSA's to save tax (in the future).

Any other investment gains are fair game for the government to tax accordingly and my argument is that since we now have TFSA's to supplement RRSP's, capital gains should be taxed at a higher rate since the vast majority of Canadians can shelter them from tax using RRSP/TFSA tax shelters.
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Online wilber

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Re: Investments
« Reply #48 on: March 13, 2017, 08:58:34 pm »
With my post at 11:00:00 and wilbers at 12:00:00 I think we should try and time the market....

 Having been through the tech bubble and 08, I'm at an age where protecting capital has to be my #1 priority.

Offline SirJohn

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Re: Investments
« Reply #49 on: March 15, 2017, 03:41:54 pm »
If you understand what the Benjamin Graham quote means then you understand what I mean: in the short run the market movea due to emotional reactions while in the long run it will be largely meaningless.

In the LONG run everything is meaningless.

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I do not see how you help your cause by exaggerating tax rates.

The top tax rate in BC is around 48%.

Why would I care what the top tax rate is in BC? It's 53% in Ontario

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High?

Yes, but not 99% so stop attempting to be hyperbolic because it looks like stupidity to me.

I didn't say it was a 99% tax rate. I was pointing out that ANYTHING short of 100% is a 'fraction'. Sorry if it was too subtle for you.


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But to claim that paying 48% on that 1% of interest being earned is going to affect your decision to try and make 7% from the stock market

It's 53% on each 1%. So if you earn 7% or say $7 the government will then tax away a major chunk of it, bringing you well below 7%

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To 95%+ of Canadians it will have little to no effect on them at all over the course of their entire lives since the majority will not have taxable capital gains since they have a tax free principal residence, a taxable RRSP account (upon withdrawal) and a tax free savings account.

No, it will only impact the ones who pay all the bills, who are also the most mobile of Canadians and who will be looking south with ever more greedy eyes as the Americans lower their tax rates while we continue to raise ours higher and higher. Not that you're in that category, obviously, which is why all you can see is that other people are successful and want the government to give you their money.

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You make $1,500 and pay $500 in income tax.

So you have $1,000 that you then invest.

No, if the government pays all my bills I have $1000 left over. Does the concept of having to pay for your own bills never enter your mind? Have you ever paid a bill, or is mom still taking care of you?

Most people struggle to save a sum of money they can use to invest in their retirement. The more the government steals from that investment - an investment which people use already taxed money for, risking it on the market - the less people have for their retirement. You losers all seem to take the attitude that people who invest in the stock market are rich. They're not.

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Instead I think you live in the basement of your parents tax free principal residence.  ;D

Gee, someone who lived free in his parents basement would be eager to tax those who make money on the stock market, wouldn't he? He'd be clamoring for it, cheering it on, delighted at the thought the government would be taking more money away from people more successful than him, wouldn't he? Kinda like... you?
« Last Edit: March 15, 2017, 03:44:30 pm by SirJohn »

Offline SirJohn

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Re: Investments
« Reply #50 on: March 15, 2017, 04:56:32 pm »
I think Joe Oliver makes an excellent case as to why raising capital gains taxes is a dumb idea.

Moving the inclusion rate from 50 per cent to 75 per cent on $25 billion in gains in 2014 would imply more than $3 billion in additional revenue to the federal government. However, estimates based on previous years’ returns are invariably inflated. The reason is that the tax is voluntary and is only triggered when assets are sold. A high rate produces a “lock-in effect” whereby taxpayers avoid selling assets to delay paying the elevated tax. They can also get creative in re-ordering their affairs to avoid the hit completely. Indeed, tax attorneys are already advertising their ability to create structures to achieve that result.

In the view of most economists, a capital gains tax will slow economic growth, reduce employment and cut take-home pay. Attractive investments may not be pursued because capital will be left in sub-optimal investments simply to avoid taxes. The result is distorted capital allocation and economic inefficiency. Higher taxes also reduce return on capital, discouraging investment. This is particularly true for manufacturers and risk-taking entrepreneurs, leading to diminished research and development, innovation and productivity improvement.


http://business.financialpost.com/fp-comment/joe-oliver-drunk-on-spending-the-liberal-governments-too-addled-to-see-the-idiocy-of-raising-capital-gains-taxes

Offline msj

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Re: Investments
« Reply #51 on: March 16, 2017, 12:35:02 am »


Why would I care what the top tax rate is in BC? It's 53% in Ontario


Still much less than the stupid claim of "99/100."

Besides, less face reality, it's doubtful you pay more than the first federal tax bracket anyway.  :D

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It's 53% on each 1%. So if you earn 7% or say $7 the government will then tax away a major chunk of it, bringing you well below 7%


No sh!t sherlock.

But you will still have much more in your pocket after tax if you pay 53% on 7% as compared to 53% on 1%.


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No, it will only impact the ones who pay all the bills, who are also the most mobile of Canadians and who will be looking south with ever more greedy eyes as the Americans lower their tax rates while we continue to raise ours higher and higher. Not that you're in that category, obviously, which is why all you can see is that other people are successful and want the government to give you their money.

No, if the government pays all my bills I have $1000 left over. Does the concept of having to pay for your own bills never enter your mind? Have you ever paid a bill, or is mom still taking care of you?


Canadians are not going to leave because their capital gains are taxed a little bit more.

Leave the country and pay the departure tax on all those unrealized capital gains that are deemed to be disposed of?

Kinda stupid.

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Most people struggle to save a sum of money they can use to invest in their retirement. The more the government steals from that investment - an investment which people use already taxed money for, risking it on the market - the less people have for their retirement. You losers all seem to take the attitude that people who invest in the stock market are rich. They're not.



Most Canadians struggle to save and do not have unrealized capital gains in nonregistered investments so they will be unaffected by any increase anyway.

When they do save they use tax shelters that give them tremendous tax benefits (RRSP and TFSA) so there is no need to provide yet another subsidy to the top 1 or 2%. 

Taxation is not theft: it is the price of civilization.  It keeps the streets safe and clean, transit running on time, police, fire and medical servcies operating well etc.... all of which are not just "gifts" that appear out of thin air for anyone to use. These are real services used and paid for by real taxpayers.


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Gee, someone who lived free in his parents basement would be eager to tax those who make money on the stock market, wouldn't he? He'd be clamoring for it, cheering it on, delighted at the thought the government would be taking more money away from people more successful than him, wouldn't he? Kinda like... you?

I want tax fairness in Canada which means ending the tax subsidy of capital gains (or at least substantially reducing it).

Sure, it is unlikely to effect me much: I use TFSA's and RRSP's to my advantage along with my invesment in my accounting partnership which is incorporated (another method to defer tax). 

Even then, a tax increase for me isn't a big deal: I can afford it and it will likely lead to me either saving more (RRSP to defer a tax increase) or spending less on my foreign travels.

That is, the multiplier effect of giving tax breaks even to guys like me (top 2-3%) is likely less than 1 whereas giving a break to those in the next 10-15% is likely to help the economy with a multiplier effect greater than 1 which, in turn, helps me generate more business.

I know how my bread is buttered and it is not on the basis of false supply side trickle down Trumped up tax cut voodoo magic.  Just look at the failure of Kansas for the most recent proof of this. 
I've gotta have more cow bell! -Bruce Dickinson

Offline msj

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Re: Investments
« Reply #52 on: March 16, 2017, 12:46:07 am »
Now onto other things besides taxation of investments: Tesla.

Anyone else find it interesting that they are going to raise more capital (which should still end up getting burned through by Q3) by using an old SEC filing from 2016?

If they wanted to raise a lot more capital then they would have to file a new offering with the SEC which would lead to new disclosures based on more recent market conditions etc. Something they likely do not want to do as the cash burn rate is becoming self-evident to even regular folks with a passing interest like me.

I have no position in Tesla though I enjoy watching Musk and love the technology.

The thing about markets is that they can continue to go up for long periods of time before people realize it is too late and then there is the great gap down.

I hope this does not happen to Tesla but if it does I think it will lead to greater things for solar and electrical cars in the future (sort of how the crash in tech/internet companies in the early 2000's helped the internet become the ubiquitous beast it is today).

Sometimes destruction leads to great things.  No?

« Last Edit: March 16, 2017, 12:47:45 am by msj »
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Offline msj

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Re: Investments
« Reply #53 on: March 16, 2017, 09:35:22 am »
Canada Goose (a company that has been around since 1957 and for which I became aware of maybe 6 months ago - we west coasters live sheltered lives with no need for $1,000 goose down jackets) has made its IPO this morning.

Any buyers?

Not my thing.
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Offline cybercoma

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Re: Investments
« Reply #54 on: March 16, 2017, 12:17:07 pm »
I think Canada Goose has fallen out of fashion due to recent criticisms in the media. It's not something I would invest in. Frankly, I'm surprised anyone invests in fashion.

Offline SirJohn

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Re: Investments
« Reply #55 on: March 16, 2017, 03:14:43 pm »
Still much less than the stupid claim of "99/100."

I never made that claim, as I've already explained. Apparently your grasp of English is even worse than I thought.

Maybe you could have a go at finishing high school one day.

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Besides, less face reality, it's doubtful you pay more than the first federal tax bracket anyway.  :D

Yeah, right. Let's look at some basic logic here (you can look up what logic is on the internet).
Here's guy A bitching about high taxes and raising the taxes on capital gains. Here's guy B demanding the government raise taxes, snarling and insulting those who earn a lot of money, eager to see them stripped of it.

Which of those two guys is a loserboy frantically pounding out flames from his mom's basement and which is paying a lot of taxes?

Not interested in the rest of your opinions on this or any other subject. Going to see if this site has an ignore feature.

Offline ?Impact

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Re: Investments
« Reply #56 on: March 16, 2017, 05:38:05 pm »
Going to see if this site has an ignore feature.
Are you a 17 year old Turkish chick?

Offline jmt18325

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Re: Investments
« Reply #57 on: March 17, 2017, 01:09:12 am »
Guys...
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Offline msj

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Re: Investments
« Reply #58 on: March 19, 2017, 12:27:46 am »
Bill Ackman is a famous hedge fund manager who was once considered among the "Market Masters" in the book with the same name by Robin Speziale. 

This book, which focuses on Canadian investors, included a chapter for the American because of his love affair with Canadian stocks: Tim Hortons, Canadian Pacific, and Valeant.

Ackman's supposed investing principles can be seen in the attached photo.

He ended up losing about $3 billion on Valeant in his fund in what, in hindsight, is clearly a violation of several principles.

Not sure why he fell in love with Valeant that would make him hold it for so long. 

As pointed out here back in October of 2015 by Josh Brown, most traders would have stopped out near the crossover of the 200 day moving average:  http://thereformedbroker.com/2017/03/14/where-traders-sold-valeant-2/

Adhering to this simple principle would have saved investors in his fund billions (or at least hundred of millions).

So, Ackman is human.

And that's the problem with investing.

It's hard because we are human.

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Offline msj

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Re: Investments
« Reply #59 on: May 03, 2017, 12:14:05 am »
Any takers for Home Capital Group?

Anyone? Anyone?

http://business.financialpost.com/personal-finance/mortgages-real-estate/canadas-boring-but-stable-reputation-shaken-as-industry-fears-home-capital-will-trigger-crisis

I need to timestamp this as I have gone full on old man kooky prior to the age of 44: have a tremendous urge to purchase Swiss francs and hide them around the house...

But not so kooky that I am buying gold or even GLD (the ETF).

Will also go on record here: have purchased shares of VRX (Valeant - USD version) which is probably stupid, but whatevs..... bought it for the Bausch & Lomb and staying for the Salix, as they say.
« Last Edit: May 03, 2017, 12:15:55 am by msj »
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